HP Laptop And Desktop Sales Down 13% YoY

hp-elite-x2-mainHP yesterday announced its first quarter 2016 financial results. Revenue of Personal Systems group which sells Windows PCs was down 13% year over year with a 3.1% operating margin. Total units were down 13% with Notebooks units down 8% and Desktops units down 13%. HP said that they will continue to shift their mix to the high end and walk away from negative margin business. This quarter, HP maintained its ASPs and gross margin year-over-year was flat. HP claimed that they are the No.1 in the Consumer Premium category among all Windows OEMs and they gained over four points of share year-over-year.

During the earnings call Q&A, HP partially blamed Windows 10 for less than expected hardware sales.

I would say that Windows 10, whilst I still believe it’s a tremendous operating system platform and universal apps and continuing computing make devices like the Elite x3 a reality, we have not yet seen the anticipated Windows 10 stimulation of demand that we would have hoped for, and we’re carefully monitoring any sort of price developments that could further weaken demand. So we’re operating in still a large market. The big guys are getting bigger, and we think there is opportunity in that landscape.

Microsoft’s move to give away Windows 10 for free to all Windows 7 and Windows 8.1 customers have affected sales of new PCs from Windows OEMs. On the positive side for the ecosystem, Windows 10 is now attracting many developers because of the huge installed base. Hopefully, PC market will soon stabilize allowing OEMs to innovate without any hindrance.

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